There is a newer version of the South Dakota Codified Laws
2006 South Dakota Code - 55-13-6 — Corporate distributions.
55-13-6. Corporate distributions. (a) Corporate distributions of shares of the distributing corporation, including distributions in the form of a stock split or stock dividend, are principal. A right to subscribe to shares or other securities issued by the distributing corporation accruing to stockholders on account of their stock ownership and the proceeds of any sale of the right are principal.
(b) Except to the extent that the
corporation indicates that some part of a corporate distribution is
a settlement of preferred or guaranteed dividends accrued since the
trustee became a stockholder or is in lieu of an ordinary cash
dividend, a corporate distribution is principal if the distribution
is pursuant to
(1) a call of shares;
(2) a merger, consolidation,
reorganization, or other plan by which assets of the corporation
are required by another corporation; or
(3) a total or partial liquidation of the
corporation, including any distribution which the corporation
indicates is a distribution in total or partial liquidation or any
distribution of assets, other than cash, pursuant to a court decree
or final administrative order by a government agency ordering
distribution of the particular assets.
(c) Distributions made from ordinary
income by a regulated investment company or by a trust qualifying
and electing to be taxed under federal law as a real estate
investment trust are income. All other distributions made by the
company or trust, including distributions from capital gains,
depreciation, or depletion, whether in the form of cash or an
option to take new stock or cash or an option to purchase
additional shares, are principal.
(d) Except as provided in subsections (a),
(b), and (c), all corporate distributions are income, including
cash dividends, distributions of or rights to subscribe to shares
or securities or obligations of corporations other than the
distributing corporation, and the proceeds of the rights or
property distributions. Except as provided in subsections (b) and
(c), if the distributing corporation gives a stockholder an option
to receive a distribution either in cash or in its own shares, the
distribution chosen is income.
(e) The trustee may rely upon any
statement of the distributing corporation as to any fact relevant
under any provision of this chapter concerning the source or
character of dividends or distributions of corporate assets.
Source: SL 1984, ch 323, § 6.
Source: SL 1984, ch 323, § 6.
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